2003 LEGISLATIVE COMPENDIUM Workers' Compensation

Fifty-three workers' compensation bills were filed during the 2003 legislative session. The legislature passed 12 bills with workers' compensation as the main topic. Of primary interest to most physicians were two bills that did not pass - House Bill 1896 and HB 3285.


On April 25, 2002, The Texas Workers' Compensation Commission (TWCC) adopted medical fee guidelines at 125 percent of the Medicare fee schedule. TMA sued to temporarily enjoin the fee guidelines from taking effect. Although the TMA lawsuit kept the new fees from going into effect during the legislative session, the association worked to pass HB 3285 (discussed below) and to negotiate a fee solution in HB 1896 to restore reasonable physician fees.

On Feb. 5, the governor's chief of staff organized the first in a series of stakeholder talks in an attempt to resolve the medical fee guideline controversy and other issues through legislative means. A matter of concern to the insurance carriers and the Texas Association of Business (TAB) was enacting some type of employer direction of care for its injured employees to help solve the enormously costly overutilization crisis in Texas. Currently, injured employees in Texas can choose any provider (including a chiropractor) to be their treating doctor and may change providers as many times as they want. To control overutilization, the largest cost driver in the comp system, TAB and the carriers wanted to pass legislation allowing businesses to offer their employees providers they believe will not over utilize. The governor's office strongly encouraged TMA to join the Texas Hospital Association, TAB, and the carriers in negotiations that might produce networks to help control utilization in exchange for more reasonable physician fees and a reduction in administrative burdens in the workers' compensation system. These negotiations revolved around a "placeholder" bill labeled HB 1896.

HB 1896 was filed by Rep. Phil King (R-Weatherford) and originally supported in the Senate by Sen. John Carona (R-Dallas). With strong encouragement from the governor's office, negotiation regarding HB 1896 began when TAB and a group of insurance carriers stated that the proposed networks would not be the typical managed care networks (i.e., designed simply to get market share and drive down provider fees). Instead, the networks would sign up providers who the carriers believe are not overutilizers and then monitor their utilization. Because these providers would be those chosen, trusted, and monitored by the networks, the carriers said that they would not impose many of the unnecessary administrative burdens found in the TWCC system and would pay the providers fair and reasonable fees.

TMA estimated that an "agreed-to" bill supported by the governor containing fee and administrative burden relieve for physicians had a much better chance of becoming law than our back-up bill (HB 3285); therefore, TMA fully committed to the HB 1896 discussions in the best of faith. For well over two months, TMA was in constant negotiations to come up with a satisfactory agreed-to bill. Four TMA physician members and three office managers regularly took time away from their practices and communities during this time to assist in the negotiations. Also during this period, one TMA staff member worked this issue almost full time, and five others contributed a considerable amount of time.

Unfortunately, TMA and the other parties could not reach a mutually agreeable bill. TMA finally pulled out the negotiations when it became clear that it would not be possible to secure adequate safeguards for injured workers, assure reductions in administrative burdens, and enact sufficient fee protections for in-network physicians.

Meanwhile, in response to TWCC's adoption of a severely reduced medical fee guideline, TMA sought passage of HB 3285, authored by Rep. Trey Martinez-Fischer (D-San Antonio). HB 3285 would have locked the current TWCC fee schedule at a budget-neutral level and more appropriately distributed payments among the major specialties that participate in the comp system. TWCC is mandated to update the medical fee guideline every two years; however, it has updated it successfully only twice in the last 12 years. A formula for the medical fee guideline would allow the commission to consistently set fees with explicable, defendable rationale free from charges of bias.

TMA maintained throughout the session that without immediate action by the Texas Legislature, workers' compensation in Texas could be headed for a crisis that would require a great deal of future legislative intervention and create a complex and adversarial sunset process. HB 3285 and its subsequent committee substitute were designed to provide a bridge to the interim, when all of the major stakeholders could have worked together under the guidance of the sunset process to develop a formula that is both fair and reasonable.

Despite massive opposition from the Texas Association of Business, carriers, chiropractors and others, HB 3285 was voted unanimously out of the House Committee on Business and Industry. Unfortunately, it died in the House Calendars Committee when the House lost its quorum in the waning days of the session.

An effort to revive HB 3285 was made late in the session. Sen. John Carona (R-Dallas) offered an amendment to HB 833 (relating to certain pharmaceutical services for an injured employee receiving workers' compensation medical benefits) that proposed creating the same budget-neutral fee schedule outlined in HB 3285. Sen. Kyle Janek, MD, (R-Houston), HB 833's senate sponsor, agreed to accept the amendment and argued on its behalf. The TMA-endorsed amendment failed adoption by a tie vote of 14-14. 

Despite HB 3285's failure, TMA and the specialty societies that participate in the comp system have committed to continuing to educate legislators about the need to address the real causes of soaring costs of workers' compensation coverage. High utilization, as opposed to prices for health care services, is cited as the principle cost driver in the comp system.

According to a Workers Compensation Research Institute (WCRI) report released in 2002, cost per claim (the total number of treatments for an injury) for Texas is higher than the median for other states, but the payment per service (physician's fee) is lower than the median.

After analyzing the WCRI studies, Texas' own Research and Oversight Council on Workers' Compensation (ROC) concluded: "It is the amount of medical treatment provided to injured workers that is the driving force in higher medical costs rather than the price of individual medical treatments and services." ROC and WCRI data demonstrate that cuts in physician fees result in increases in utilization. In fact, inadequate fees may explain current high utilization in Texas.

Other Workers' Compensation Bills of Possible Interest

HB 145 by Rep. Burt R. Solomons (R-Carrollton) will allow TWCC to file a lawsuit to enforce a TWCC interlocutory order, final order, or decision when a party refuses or fails to comply with the order or decision. The bill will entitle TWCC to reasonable attorney fees and costs for prosecution and collection of the claim. Injured employees will be entitled to a penalty equal to 12 percent of the amount of benefits recovered in the judgment, interest, and reasonable attorney fees for the prosecution and collection of their claim. HB 145 includes a provision that will require a party seeking judicial review of a TWCC decision to provide TWCC and any opposing party with written notice of the lawsuit. Failure to provide written notice to TWCC will prevent the party from pursuing judicial review.

Under current law, only a claimant may sue an insurance carrier to enforce compliance with a final order or decision rendered by TWCC. Current law also provides for an administrative penalty for failure to comply with an order from TWCC. These provisions may not be effective due to delays and litigation costs the claimant incurs and the lack of enforcement by the court system.

This measure should affect insurance carriers much more than physicians. It will give TWCC more defined powers to enforce its sanctions against carriers that, in many instances, would benefit physicians; however, the requirement that a private claimant notify TWCC of any judicial review is just an added burden to system participants. The new law also should provide injured worker claimants a financial incentive to petition the court to enforce TWCC's rulings.

HB 2095 by Rep. Robert L. "Robby" Cook (D-Eagle Lake) allows an unincorporated association or business trust composed of five or more private employers to establish a workers' compensation self-insurance group. The employers must be engaged in the same or similar type of business; be members of a bona fide trade or professional association that has been in existence for at least five years before the establishment of the group; and be entered into agreements to pool their liabilities for workers' compensation benefits and employers' liability in this state. Although further examination is needed, this new law could allow TMA to sponsor more affordable workers' compensation insurance to its member physicians.

HB 2198 by Representative Solomons addresses the Fulton court decision and relates to the certification of maximum medical improvement and the impairment rating assigned to an employee in a claim for workers' compensation benefits. This bill makes the first valid assignment of impairment rating to an employee final if the certification of maximum medical improvement and/or the assigned impairment rating is not disputed within 90 days of written notification provided to the claimant and the carrier through verifiable methods.

HB 2199 by Representative Solomons extends the time for an insurer to begin payments or notify the injured employee and TWCC of the carrier's refusal to pay from seven to 15 days. The new law further provides that an insurer's noncompliance does not waive the right to contest compensability but rather commits an administrative violation.

HB 3168, Rep. Helen Giddings (D-De Soto), mandates that TWCC study new alternate dispute resolution processes. The new processes are to be for medical services costing less than the cost of a medical necessity review by an independent review organization (IRO). This bill contains language that also pertains to the certification of maximum medical improvement and the impairment rating assigned to an employee in a claim for workers' compensation benefits.

Senate Bill 478, Sen. Robert Duncan (R-Lubbock), excludes from workers' comp coverage persons who perform services that may benefit a political subdivision or are employed by or under contract with a performer providing those services but do not receive payment from the political subdivision for the performance of the services, if said services are performed in connection with the operation or production of one of the enumerated professions. These professions include: a stock show; a rodeo; a carnival; a circus; a musical, vocal, or theatrical performance; a professional baseball league or game; a professional hockey league or game; a wrestling event or match; a vehicle or motorcycle event; or another entertainment event.  

SB 1572 by Senator Carona allows TWCC to adopt individual treatment protocols. The bill also allows TWCC to adopt scientifically valid and outcome-based treatment guidelines or protocols that are not recognized nationally when national guidelines or protocols are not available.

SB 1574 by Senator Carona provides that a person who serves on the medical quality review panel is immune from suit and from civil liability for an act performed, or a recommendation made, within the scope of the person's functions as a member of the panel if the person acts without malice and in the reasonable belief that the action or recommendation is warranted by the known facts. In the event of a civil action brought against a panel member that arises from the person's participation on the panel, the member is entitled to the same protections afforded a TWCC commissioner.

SB 1574 also allows TWCC to share confidential information to which access otherwise is prohibited with the Texas State Board of Medical Examiners (TSBME) or the Texas Board of Chiropractic Examiners (TBCE), and vice versa. Information shared between TWCC and either of these agencies is to be confidential. Furthermore, if TWCC or TSBME discovers an act or omission by a physician that may constitute a felony, a misdemeanor involving moral turpitude, a violation of state or federal narcotics or controlled substance law, an offense involving fraud or abuse under the Medicare or Medicaid program, or a violation of this subtitle, the agency shall report that act or omission to the other agency; this stipulation also apples to TWCC and TBCE.

SB 1804, Sen. Chris Harris (R-Arlington), states that TWCC may not prohibit an insurance carrier and a health care provider from voluntarily discussing pharmaceutical services and may not prohibit an insurance carrier from certifying or agreeing to pay for health care consistent with those agreements. The bill makes a carrier liable for health care treatment and treatment plans and pharmaceutical services that are preauthorized voluntarily and prohibits insurers from disputing the certified or preauthorized health care treatment and treatment plans and pharmaceutical services at a later date.

The bill also amends Section 413.031 of the Texas Labor Code by requiring an independent review organization that is performing a review of medical necessity of disputed health care treatment under the provisions of Section 413.031 to consider TWCC's health care reimbursement policies and guidelines adopted under Section 413.011 if those policies and guidelines are raised by one of the parties to the dispute.

SB 1804 provides that if an IRO's decision is contrary to the relevant TWCC policies or guidelines, the IRO must indicate in the decision the specific basis for its divergence in the review of medical necessity. The bill includes language that states an IRO is not prohibited from considering and applying the relevant payment policies in any dispute, regardless of whether those policies are raised by a party to the dispute.

Workers' compensation TMA staff contacts:

-Rich Johnson, director, Division of Medical Economics, (512) 370-1315
-Donna Kinney, manager, Regulatory Analysis and Advocacy, (512) 370-1422
-C.J. Francisco, JD, senior counsel, Office of the General Counsel, (512) 370-1339

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Last Updated On

July 23, 2010

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